Which one of the following would be the most logical reason to use a synthetic forward contract to hedge?

Here is the answer for the question – Which one of the following would be the most logical reason to use a synthetic forward contract to hedge?. You’ll find the correct answer below

Which one of the following would be the most logical reason to use a synthetic forward contract to hedge?
a. forward contracts are not available in the currency of choice
b. when time horizons are short, forward contracts can be expensive
c. the underlying transaction is too risky
d. the underlying transaction gives you an asset

The Correct Answer is

a. forward contracts are not available in the currency of choice

Reason Explained

a. forward contracts are not available in the currency of choice is correct for Which one of the following would be the most logical reason to use a synthetic forward contract to hedge?

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